McCaffrey v. Gatekeeper USA, Inc

Background

Timothy Andrew McCaffrey, proceeding without a lawyer, brought claims concerning securities fraud and negligent misrepresentation against individual defendants A. John Leontakiankos and John Seetoo, as well as corporate defendants Gatekeeper USA, Inc., Asgard International, Inc., and Ares Ventures Inc. The corporate defendants’ lawyer withdrew in September 2018, and the defendants did not retain new counsel. The court entered default judgment against the corporate defendants on liability in 2018 and later entered summary judgment against all defendants. The remaining issue for trial was punitive damages.

Leontakiankos and Seetoo jointly asked the court to seek volunteer lawyers for them at the punitive-damages trial. The court treated the request as two separate applications because joint representation could create a conflict of interest. The court also noted that the federal statute allowing a court to request volunteer counsel applies to natural persons, not corporations.

Legal standard

Under 28 U.S.C. § 1915(e)(1), a court may request that a lawyer volunteer to represent a person who cannot afford counsel. In a civil case, the court is not required to provide a lawyer and cannot force an attorney to accept the representation. Courts consider whether the person can afford counsel, whether the defense or claim appears substantial, the person’s ability to investigate and present the case, the need to question witnesses, the complexity of the legal issues, and whether counsel would likely lead to a fairer result.

Court’s analysis

The court found that both individual defendants were unable to afford lawyers. Leontakianakos reported serious medical problems and financial hardship. Seetoo reported that the litigation had affected his ability to work in the securities industry, that he was relying on freelance financial writing, and that he had substantial debts. Both defendants said they could not pay new retainer fees and had contacted four law firms. The court also noted that they already faced a $94,260.27 judgment.

The court treated the requirement that the defense appear likely to be substantial as satisfied because the trial would proceed whether or not the defendants had lawyers, and experienced counsel would be better positioned to identify potentially substantial defenses. Applying the remaining factors, the court emphasized that a jury trial would involve conflicting evidence and cross-examination. It found that the individual defendants, as nonlawyers, had limited ability to present their defenses and that counsel would likely produce a quicker and fairer determination.

Order

The court directed the Clerk of Court to attempt to locate one volunteer lawyer for Leontakianakos and another volunteer lawyer for Seetoo. The lawyers’ representation would be limited to the matters described in the order, principally the jury trial on punitive damages. They would not be required to represent either defendant on appeal, and their representation would end when judgment was entered on punitive damages or when counsel filed a notice of completion. The court stated that there was no guarantee a lawyer would volunteer and that the defendants should be prepared to proceed without lawyers.

Disposition

The court granted the request only by directing the clerk to seek volunteer counsel; it did not guarantee that counsel would be found or require any attorney to accept the case.